The Pros and Cons of Owning a Home Technology Showroom

8/9/2017 12:39:00 PM
I participated in the AV Nation ResiWeek podcast this week, and while chatting with the other guests about my recent blog post about freight charges eating up profits, it became clear that there was a real business model difference between those of us that owned a showroom and those of us that didn’t.

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For example, the others without showrooms dealt almost strictly in custom installations. They knew what jobs were coming up, exactly what inventory they needed, and thus they could plan and forecast purchases, letting them bundle orders together to meet freight. My company has a showroom, and about twice a week someone will walk in and want to purchase a TV right then for installation as soon as possible. These kinds of sales allow us to close quick, easy jobs, but can’t really be planned for.

In the past, the showroom was the thing that defined and established a company and separated “us” from “them.” It showed a level of commitment and that you weren’t just someone who threw a decal on a truck and decided to be an installer.

Today, however, many successful companies do terrific, high-end work without having a showroom, and that is often the path that many new CIs take. Having had a showroom for the past 20-plus years, here are some pros and cons that I can share…

Showroom Pros
1) It still helps to legitimize your business. When you tell people that you have a showroom, they are almost always impressed with that, even if they never come by. A company with a storefront gives the impression of being solid and stable, and it certainly isn’t as easy to just fold up shop and be gone tomorrow.

2) It is a great meeting place for new clients. While many people use their own homes, model homes, or even clients’ homes as meeting locations, inviting people to visit your showroom is a lot less intimidating for someone. Also, speaking for myself with a 10- and one-year old, my house isn’t always “drop-by” ready to receive visitors, nor would my wife love all of my clients knowing where we live.

3) It’s the perfect place to demonstrate new technologies and go over system options and installation ideas. We have several demo areas in our showroom that let us walk customers through the entire process of their installation, from soundbars to 7.1.4 Atmos, to distributed audio, to automation and control, they can see and touch the gear that we are proposing for their system.

4) It’s the central point for all of your business. It’s the place where you park the vans, house your inventory, have employees start/end their day, receive shipments, meet with reps, etc.

5) You will benefit from walk-in traffic. People will walk in just to see what you do, and people will walk in to purchase things. Many people love to support the local business as opposed to a big-box store, and having a showroom announces your presence to the world. With our building located less than 50 yards from one of the major highways, literally thousands of cars drive by our store every day. Each of these cars is a chance to make an impression that will hopefully stick in someone’s mind that they will call us the next time they need something.

Showroom Cons
1) A showroom is a huge, ongoing expense. Between the rent/mortgage on the building, the electricity, the water, the phone, the internet, the inventory to display, and demo gear, a showroom will be your biggest expense next to labor.

2) It needs to be staffed. We are open Monday through Friday, from 10 a.m. to 6 p.m., so that means every week someone has to commit 40 hours to being in the store. (We were open Saturdays for more than 20 years, but finally decided to close on Saturday this year as we so rarely had any business that day, and my business partner and I were tired of having to work on the weekend. If we didn’t have the showroom, we would effectively gain another full-time installer.

3) It needs to be cleaned and maintained. Displays have to be dusted, windows need to be cleaned, carpets must be vacuumed regularly, bathrooms need to be scrubbed and stocked, and trash needs to be emptied. I always have a moment of, “Oh, God! Please let it not be too gross!” when a woman comes in and asks to use our bathroom.

4) Displays need to be updated. You can’t have a five-year-old receiver connected to a three-year-old TV and expect people to be impressed. Display systems are going to need to be updated and refreshed on a regular basis, and this is expensive. Every time we put a new TV out on the floor, we are basically throwing away $500 (or more). Projectors are an even bigger loss. Fortunately speaker companies don’t change their lineup as often, but you’ve got to keep the demo systems current and up to date, and come up with a strategy to sell the old gear in a timely manner.

5) You will be forced to deal with a broad range of people that might not be your ideal clientele. Remember that saying, “You’ve got to kiss a lot of frogs…?” Well, not everyone that comes through your door is going to be a prince. There are a lot of people that will come in to just probe you for knowledge, or just see what you do or what you sell. We get a ton of people visiting from out of state that like to just “check out the local AV shop.” Sure, these are all opportunities to win hearts and minds, but it is also eats up a lot of your time on things that rarely materialize into sales.

6) You will literally get “showroomed.”

7) Not as many people care about it. It used to be that people wanted to see and touch the brick-and-mortar, but today, not so much. For example, my two biggest clients ever have never bothered to come by, despite repeated invitations.

Unfortunately, for all the cost and hassle of owning a showroom, the reality is that more and more people are comfortable making purchases sight unseen and won’t bother to come visit your showroom or even care that you have one.

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